Usg Offers $200 Million Notes In Buyback Bid

December 18, 1986

USG Corp. announced a public offering of $200 million of senior notes, the first round of debt financing for the company`s buyback of as much as 20 percent of its common stock.

The Chicago-based maker of building products said it would offer $100 million of 7 3/8 percent senior notes due Dec. 15, 1991, and $100 million of 8 percent senior notes due Dec. 15, 1996. A USG spokesman said proceeds would be used primarily to pay for part of the stock buyback. The company expects to spend $500 million to $600 million to repurchase 13 million to 14 million common shares.

As of last Friday, USG had bought back about 6 million shares, including a 3.1 million stake held by the Belzberg family of Canada.

USG paid the Belzbergs $139.6 million, or $45 a share, ending a possible takeover threat but resulting in a lawsuit charging ``a gross premium`` had been paid.

Salomon Brothers Inc. will manage the underwriting group for USG`s public offering.